In a recent series of bitter exchanges, the University of Ulster's provost at Magee Prof Deirdre Heenan accused Sinn Fein of “smoke and mirrors” over the issue.

Pro-expansion campaigners have also reiterated their commitment to enlarging Magee and have defended their record against criticism from others including the Londonderry Chamber of Commerce and lobby group University for Derry (U4D).

The chairman of U4D, local businessman Padraig Canavan, last night welcomed Mr Nesbitt's intervention, which came as he officiated at UU graduations at the Millennium Forum in the city.

In an apparent attempt to restore relations, Mr Nesbitt outlined a range of recent and forthcoming developments towards growing Magee.

“The University of Ulster is the city’s university, and we are committed to its development at the Magee campus and other sites,” he said.

“A city is its people and to realise Derry’s potential the people of this city must work together, along with the university, along with its businesses and along with its civic institutions in pursuit of the common goal of promoting this city as a great place to life, a great place to study, a great place to work and a great place to visit.

“That is our challenge, and I urge you to rise to it.”

Turning to the issue of student numbers, the chancellor added: “Student numbers at Magee are already on target to grow by about 1,500 since 2008, with the total soon to exceed 5,000.

“Each additional full-time student, and this is an important message, generates directly a minimum of £10,000 for the local economy and that does not include the additional indirect impact that spend has through the creation of new jobs and business opportunities. So an additional 1,000 full-time students generates £10m each year for the local economy — that’s £250m over a 25-year period.”

U4D said they “strongly welcomed” the comments by Mr Nesbitt.

Mr Canavan said: “U4D concurs with Jimmy Nesbitt's central point on the economic benefits and we agree with him that the interests of the wider area are best served by the expansion of Magee.

“U4D would welcome the opportunity to meet with the chancellor and collectively with politicians, institutions and other interested parties to best determine how to build on the current momentum to deliver on this shared ambition.”